All Forum Posts by: Craig Moore

@Craig Moore I would definitely recommended jumping in full time if you have the living expenses (plus start up costs) saved up.  Having the time and energy to learn, network and pursue leads during all hours of the day/week will make you competitive when starting out.  Experienced agents will take you more seriously and you can assure possible clients that this is your full time job, your career and they will be your number one priority, not your W2 boss.  

That being said, unless you have a few SOLID buyers or sellers lined up to work with AS SOON as you sign on, you'll probably go at least 4-6 months before getting a commission check.  Remember, a typical lender financed real estate transaction will take 40-60 days to close if all goes well but 90 days is not unheard of.  You won't get paid until after your broker gets paid and they don't get paid until the day of closing.  All of this comes AFTER you track down some good, solid, HOT leads that are willing, able and motivated to buy or sell.

I recommend Keller Williams to almost all agents, especially new ones.  The training, marketing material and mentor-ships are top notch.  Plus we have some very helpful tech and we'll be getting a whole updated tech suite this fall.  When you're new, you'll want all the support and recognition you can get behind you.  KW does that.

Like any other broker you have office fees and commission splits plus your MLS and REALTOR fees but at least KW has profit sharing, a commission cap and the ability to form your own team.

Message me if you'd like to speak with my office CEO (Team Leader).  She can fill you in on any specific info.  (This goes for anyone else too - @Samir Shahani, @Joddie Mcclain, etc)

I would say @Mike Cumbie is pretty accurate with his $5,000 guesstimate.  I am a new agent from NJ.  I have easily spent about $3,000 and I haven't bought any post cards, signs or anything he mentions pertaining to open houses yet. 

Get a commission check in the first 3 months?  This would be hard to pull off dealing with owner occupant clients.  Maybe if you can somehow convince a seller to let you list their house your first week of practicing real estate or luck in to picking up a buyer your first month.  It's difficult when starting out to get clients to trust you in such a large transaction.

If you want to immediately start cashing checks I would look at every REO, learn the numbers, and cater to cash investor buyers. These are typically quick closings without the drama of banks, inspections, appraisals, etc.

Other options for immediate business would be to join a team or do new construction and be a site agent (would be very difficult to find this kind of gig starting out).

Bouncing should work, generally speaking when a bouncer is working not a whole lot of people are running around looking at houses.

@Russell Brazil  I grew up in the RE business so from about 7 years old on I was with Agents all the time first my dad as an agent then when my dad had his own company.... So

there is no question that in this industry and in all sales some have an innate ability that is needed to really make this work.

but in our day it was a well known fact you needed at least 1 year of living expenses in the bank before you venture into full time real estate.. you simply don't flip a switch... it takes time to prime the pump.

The other thing is those with families had a lot of things tugging at you .. maybe not as much now with internet but in my day.. its a nights and weekends business.. if you think its 8 to 5 your sunk before you start.. I played golf most days and started at 4pm.. and NEVER took one day off on a weekend.. that's when all the action happens.  remember who are your clients If your doing resi work its mom and pops who have 8 to 5 Monday through Friday weekends off generally.

so new agent just is torn with family duty and wife wants him home at 6 to help with dinner and kids .. needs to go to weekend soccer games and other family activities..

its a HUGE sacrifice to do this business and unless you have that talk with your significant other its a hard go.  Ergo so many wash out  just can't juggle it. and can't put the time in when its most productive.

Now for those in the commercial world or mainly working with investors.. you can run it more 8 to 5.. but you need to be ahead of the deals also and other skill sets..

My wife is a Broker of almost 30 years me 42.. we understand the hours it takes and accommodate our lifestyles

where I saw most agents get totally side ways as well was them taking a vacation in prime selling season.. We never vacationed until December.. when things generally slow down.. you have an agent has a good half a year takes off in July for 2 weeks comes back takes a week to get settled another few weeks to get a deal going now they have 4 to 6 weeks with nothing in the pipe line.

I know these are things most folks don't think about with the business but its a LIFESTYLE in my mind not a job or a business.

@Craig Moore

Its a tough business, especially for those starting out. Most agencies don't pay salaries and so the agents are working straight commission. They don't have the client list of more seasoned agents and struggle to make a decent wage. There are cost to be an agent including Realtor fees, MLS fees, errors and omission insurance, and continuing education. Sunk costs are $2,000 a year.

Its the 80/20 rule, 20 % of agents make 80% of commissions.  and new agents are usually in the lower 80%.

 Those are definitely good steps to take. Being part time isn't a bad idea either so you can pull in a salary from a w2 job while learning the business.

Being a real estate agent is much more akin to running a business than having a job. I think the failure rate of small business is 50% in the first year. Running a business means that you have to be capitalized...and new agents simply don't have capital. I was a part time agent for nearly a decade before becoming a full time agent, so I was already well aware that to be a successful solo agent would mean having overhead of $25k to $40k. How many new agents can expend $3k a month in overhead with zero money coming in, and have the faith that next year they will make a lot of money. Small business owners often are aware that they have to spend money and still half of them fail.

It's a tough business. New agents often overvalue themselves because they want to believe in the dream versus the very hard reality of what it will take for them to be successful. When that reality hits them in face and they can't put food on the table or keep the lights on then they either get the fire in the belly to do what it takes to succeed or they quit and go back to the J-O-B.

Sales are not for everyone and it takes a certain kind of personality to do it over, and over,and over again on a high level. The rest are like a blind squirrel finding a nut ( commission check) occasionally. They make some money but not enough to live on.

I saw all of this in the last cycle. I am 14 years in and a principal broker for commercial retail properties transacting. Right now residential is hot in a lot of markets. Back in 2003 to 2006 it what was the same. Everyone was an agent and buyers were buying up properties all over the place to live in. Thoughts of sugar plums and fairies danced in the home buyers minds  to refinance in a few years and pull equity out for the new car,boat, vacation,etc.  I saw a property the other day for 185,000 that used to be 100,000 3 to 4 years ago and 25 buyers with showings are looking at it listed just 2 days ( a friend does residential). 

When the last downturn hit I do not know the number but maybe half a million agents left the business or more. You see these ebbs and flows with the cycles. It will happen again when the market changes and the marginal agents will be weeded out quickly and leave the business.

When you have seen a few cycles you do not act like some of the other brokers/agents. I see new agents getting into the business and they know nothing of cycles. They are spending money like water. Especially agents now and the ones 1 to 3 years into the business. They are saying money is good and buy the bigger house for themselves, nicer car, vacations etc. to show off to their friends.

The cycle slows eventually and all that debt comes crushing down on them and the monthly commission falls as deals dry up. Now you see them selling and working part time at Home Depot, Wal-Mart, Lowe's etc. to pay bills.

If they would have invested the money in the good times to get 50k or higher in passive annual cash flow then they would be in a much better situation for themselves. Nobody delays gratification anymore. I live a comfortable life but way below my means. Problem with some agents is they make 100k annually and live an 80k lifestyle.

If you make 750,000 to 1,000,000 annually and live an 80k lifestyle that is a much different example. In one you are 80% of your earnings pre-tax. In another maybe 10 to 15%.

I prefer to invest money to create more passive income. Then I slowly inch up my lifestyle but very conservatively compared to income etc.